Correlation Between Shinhan Financial and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both Shinhan Financial and Dongbang Ship at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shinhan Financial and Dongbang Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Financial Group and Dongbang Ship Machinery, you can compare the effects of market volatilities on Shinhan Financial and Dongbang Ship and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shinhan Financial with a short position of Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Financial and Dongbang Ship.
Diversification Opportunities for Shinhan Financial and Dongbang Ship
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Dongbang is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Financial Group and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery and Shinhan Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shinhan Financial Group are associated (or correlated) with Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of Shinhan Financial i.e., Shinhan Financial and Dongbang Ship go up and down completely randomly.
Pair Corralation between Shinhan Financial and Dongbang Ship
Assuming the 90 days trading horizon Shinhan Financial Group is expected to generate 0.4 times more return on investment than Dongbang Ship. However, Shinhan Financial Group is 2.49 times less risky than Dongbang Ship. It trades about 0.35 of its potential returns per unit of risk. Dongbang Ship Machinery is currently generating about 0.09 per unit of risk. If you would invest 4,820,000 in Shinhan Financial Group on November 4, 2024 and sell it today you would earn a total of 290,000 from holding Shinhan Financial Group or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Financial Group vs. Dongbang Ship Machinery
Performance |
| Timeline |
| Shinhan Financial |
| Dongbang Ship Machinery |
Shinhan Financial and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Financial and Dongbang Ship
The main advantage of trading using opposite Shinhan Financial and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Financial position performs unexpectedly, Dongbang Ship can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.| Shinhan Financial vs. ABCO Electronics Co | Shinhan Financial vs. Jahwa Electronics Co | Shinhan Financial vs. Cuckoo Electronics Co | Shinhan Financial vs. Kukdong Oil Chemicals |
| Dongbang Ship vs. Daol Investment Securities | Dongbang Ship vs. BooKook Steel Co | Dongbang Ship vs. Moonbae Steel | Dongbang Ship vs. DB Financial Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |